Supply Chain (Re)Design and Pricing for Biomass Ash Valorization as Supplementary Cementitious Materials

Biomass ash is a byproduct of renewable energy generation that can be used in the cement and concrete industries as a supplementary cementitious material (SCM) to reduce their environmental impact. However, using biomass ashes as an SCM presents challenges, such as the distant location of crops and processing plants from cement and concrete plants, the absence of a supply chain to connect the biomass ash and cement/concrete producers, and the lack of a mechanism to set the price of the ash. We adopted a supply chain perspective to evaluate the environmental and economic impact of incorporating biomass ashes as an SCM in the cement and concrete industries. We developed a bilevel optimization model considering the strategic behavior of the two stakeholders of the supply chain: the biomass ash generator, which maximizes its profits by setting the price of the ash, and the cement/concrete manufacturer and minimizes its total operating costs, including the processes necessary to adapt its supply chain for the use of new raw material. We validated the model using data from the Colombian context at a nationwide industrial level. Our results indicate that introducing SCMs can potentially reduce CO2 emissions without increasing the cost of the supply chain.